The Work Begins
The weeks are getting longer or is that just me?
In many ways it’s a good thing – means we are still alive, means we are working more.
At the end of this edition we outline our community support for year ended 2019/2020.
Market in a second
Its 6:00pm Saturday
How was your week?
We began with receiving criticism for last week’s article on the Top End 100 Auction test in May, the portrayal of the Off-market as a swamp and my comments on Clearance rate exaggerations.
We offered to print in full (up to 400 words and unedited) their take. Nothing has arrived.
The next day, we completed a deal similar to an off-market deal, 2 months in the making for a neighbour at circa $5m.
Mid-week was taken up confirming with 2 selling clients that multi-list wasn’t appropriate for their homes.
Client One: circa $7m. After a failed selling campaign, we couldn’t recommend a Multi-list. We had a very clear recommendation and we felt that would help them, but it wasn’t Multi-list.
Client Two: The sell part of a buy and sell in Boroondara – the sell part had failed twice before our arrival and we didn’t recommend a Multi-list – we recommended a very different strategy which was not accepted.
On the buying side of things and whilst this was going on, 51 Broadway converted from an EOI to an auction with 3 days notice. Yes, we are involved in buy and sell at all ends of the upper market. Let’s tell the story.
1. 51 Broadway – Private Auction $2.5m (buying)
2. Multi-list – Grace Park Hawthorn $14.2m (selling)
3. Our 2019/2020 James Buy Sell sponsorships
51 Broadway - Private Auction $2.5m
Our clients made contact with us at the beginning of this public campaign – they were a referral and they had seen our May 23 Marketnews video.
Our initial advice was the quote was conservative (it was subsequently lifted plus the top end of the initial quote was exceeded by $100,000 on the first bid).
No criticism here – good marketing would be our comment. Get us in, get us bidding, put it on the market and sell it – all with moving quotes.
That could be good agent work – not necessarily work to be critical of.
This was our rating:
Back to buying strategy: Our second piece of advice was go early and go hard.
Our clients couldn’t follow this, as unfortunately everything had to be re-checked with the bank.
And that is where the deal was possibly lost – not in the bidding strategy or other bidders or the money, but in the timing.
Anyway, the sellers moved from EOI to public auction by advertising publicly (3 days before EOI close, last Tuesday) that it was being converted to an auction.
This was smart as it removed the chance of cooling – off and buyers could see their real competition and therefore put their best foot forward in an uncertain market.
In other words, it had moved from smokes ‘n’ mirrors to transparency.
The auction (Tony Doh):
The original agent quote was $2.1m to $2.3m and our rating advice was price should lay between $2.4m to $2.6m.
The new agent quote was $2.2m to $2.4m and after the conversion to auction we advised our clients the same $2.4m to $2.6m, however now felt more likely to be $2.5m to $2.6m.
It was a cold night as you can see with 6 bidding groups (one on the phone) present and 4 actually bidding, making it a volcano auction.
The auction opened at $2.4m – a slight repose from the rest of the crowd followed, till Bidder no 2 added $10,000. This brought the question and confirmation it was on the market unconditionally to be sold that night.
Bidding amounts as high as $10,000s and as low as $1,000s. The 4 bidders were still alive at $2.5m but they dropped off fast, until Bidder 2 was left with the prize at a fair and balanced price for this market of $2,529,000.
We liked the relaxed style of the vendor advocate and auctioneer Tim Picken (even though he’s a competitor)
- The $2m market continues to be strong for A graders
- Go early and hard if it makes sense – whilst vindication is important, it can come at a cost.
- Get a bank manager or broker you can work with.
- Timing here was probably the difference, not the amount of money.
Multi-list begins - Grace Park Hawthorn
Multi-list has been well received by many high-end agents.
This was suggested by the attendance of over 20 key agents on Wednesday and Thursday of this week at the Grace Park home going to Off-market Multi-list in early July.
Agents were generous and helpful in advice on presentation, pricing and marketing.
How will this work.
Any agent can introduce a buyer to this home though the managing agent for a success fee of 1% plus GST.
- Find Buyer
- Bring Buyer to home
- Deliver offers on a contract
So what’s the difference in how the sale management process is run under Marketnews Multi-list?
- All agents and therefore all buyers are exposed to the home – not just one agent and one buyer.
- There is an authority – on that authority there is a written commission sharing arrangement and the agent who supplies the buying contract will be awarded the commission. The authority is available for viewing by agent.
- It’s straightforward (meaning one price, same for agent, buyer and seller) – all buyers have to do is decide if they want to buy the home and if yes then will they pay the asking price. If yes again, then the home will be sold.
- Documentation prepared in advance. Its BS to think of starting a campaign without paperwork to take an early and many times the best offer.
- A website accessible to all agents via passcode which has all other unbranded supporting documentation, video marketing and possible inspection times.
Finished the week looking at other homes for suitability and four other buying negotiations.
This market is not easy for buyer or seller or agent, but it is workable and will improve further when
- Belief in self-interest (now)
- Trust in systems
- Fluidity in the banks
Our 2019 / 2020 Sponsorships confirmed
This above and our lead Marketnews picture are from Selian Hospital Tanzania
We believe that our existence is not all about profit.
Our purpose: To make a positive difference
Our ethic: Do unto others as we would want done unto us
Our way: The balanced middle is enough.
Since 2003 we have made significant sponsorships to community organisations.
We promise to give $5,000 of each selling management commission back to the community in the form of sponsorship.
This year despite Covid-19 we have honoured our commitments with $117,642 in community sponsorships
The breakdown is as follows:
Nepali Individuals ($1,756)
) Two visits to Africa (we paid own way) by 3 staff to view how money was being spent at Selian Hospital – we get weekly updates of all expenditure with receipts and videos.
) Moving to African run community organisations has been challenging. We have different mindsets, recording requirements, cultural issues, communication problems and more. Having said all that, this year has been the most rewarding move we have made in some time. 120 children have had surgeries performed in Selian hospital in Africa by African doctors and we congratulate the doctors and staff at this hospital.
) Since 2003 we have supported the Melbourne Homeless family’s program with over $300,000. We are looking at alternatives as there is now government funding in this area. We have basic agreements (Covid-19 interrupted) with Marshall White Foundation and Launch Housing to expand the Homeless support in a wider program.
We keep detailed spreadsheets and receipts for our accountant and tax office, which are submitted each year as part of our overall business accounts. If at any time, you require detailed proof of level of community sponsorship we are happy to provide.